Use The Wisdom Of The Crowd — What Links Democracy To A Dead Ox?
Donald Trump was elected by the majority of states’ electorates votes as the next POTUS, and the majority of British citizens had voted last June to leave the EU. Both results decided by asking a large body of people came as a surprise for the media and the professionals pollsters aiming at measuring trends and statistical probabilities. Although, such results were indeed presented as possibilities.
Statistics had failed in these and other incidents to provide the media and public with an accurate prediction, not because of any specific methodological flaw in any of the models. But because statistic probabilities can no longer help us predict trends as our social reality becomes more and more complex and interconnected which in turn give rise to more and more surprises and disproportions within it.
Research has shown that a crowds can be wise, and can even outperform experts who have access to privileged and relevant information —
The morning I met Elaine Rich, she was sitting at the kitchen table of her small town home in suburban Maryland trying…www.npr.org
Asking large groups of random people to give their independent predictions can “significantly improve the forecast” say even the CIA. And in open platforms like Almanis, the possibility of ‘crowd forecasting’ is now available. But listening to large crowds did not start recently, it is over a 100 years old (as a science)
Francis Galton was a was a Victorian anthropologist, inventor and mathematician, a cousin of Charles Darwin. In 1906, visiting a livestock fair, he stumbled upon an intriguing popular contest. An ox was on display, and the villagers were invited to guess the animal’s weight after it was slaughtered and dressed. Nearly 800 participated, and Galton was able to study their individual entries after the event. He was astonished to discover that the median of all the entries (a terminology that he himself had introduced, but chose not to use on that occasion) was reported by Galton as 1,207 pounds. Which, to his surprise, was within 0.8% of the actual Ox’s real weight (approximately 1,198 pounds) measured by the judges. The average of all guesses was 1,197 pounds, a mere one pound off the actual weight.
So, does that mean I should start tapping into the wisdom of the crowds by asking all the parents in my son’s PTA to give me a prediction about the S&P500 and invest according to the average prediction? Well, I might give it a try…
Still, the wise crowd is not just any crowd. In his book “The Wisdom of Crowds”, James Surowiecki points to four conditions that make up a “wise crowds” — diversity of opinions (based on any type of ‘private information’ or interpretation), independence of each other, decentralization and aggregation (any method to summarize all predictions into a decision)
I believe that we can make good use of this crowd forecasting science of ‘wise crowds’ for making better decisions under uncertain and complex conditions. We should think of creating a ‘wise crowd team’ built from diverse, decentralized and independent colleagues and follow their predictions about the critical decisions we are making.
Would you try it in your workplace? If you do, let me know through my website at www.complextochange.net